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The Chinese economy lurched closer to deflation in January, as the rate of
consumer price rises fell to depths last seen in the 2009 aftermath of the
global financial crisis.

The January reading of consumer prices showed the index rose just 0.8 per cent
from the same period a year earlier, taking a majority of economists by
surprise and prompting market speculation that Beijing will intensify its
targeted stimulus programmes. Most analysts had expected the CPI to remain
above the 1.0 line.

The risks of deflation – the potentially debilitating phenomenon that starts
with falling prices but can lead to long